Bill Would Extend Ponzi Scheme Tax Breaks

Mar 26 2010 | 4:01am ET

Ponzi scheme victims would have recourse to millions in new tax breaks under a bipartisan proposal introduced yesterday in the U.S. Senate.

The measure, sponsored by Sens. Charles Schumer (D-N.Y.) and Jon Kyl (R-Ariz.), would extend the tax breaks to indirect investors in Ponzi schemes. Currently, indirect investors are eligible for neither existing tax breaks nor to file claims with the Securities Investors Protection Corp.  That would be a boon to thousands of investors who lost money in Ponzi schemes through their investments in pension funds, funds of hedge funds or feeder funds—such as many victims of the Bernard Madoff scandal.

The bill would also extend tax breaks—previously available only to victims who lost money only in taxable accounts—to users of pre-tax individual retirement accounts.

The relief would be available to victims of Ponzi schemes uncovered in 2008 and 2009, but might not cover frauds uncovered this year.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...